Myanmar’s Fraud Epidemic: Types of Financial Deception That Target Innocent Victims

In a country where financial literacy and education are often lacking, fraudulent schemes have become rampant, with both consumers and businesses falling prey to deceitful tactics. The Myanmar Times takes a closer look at the types of financial fraud that are commonly perpetrated in the country.

Consumer Frauds: The Face of Deception

Advance Fee Scams

From advance fee scams to pyramid schemes and investment frauds, consumer frauds have become a major concern in Myanmar. Recent cases have seen millions of US dollars lost due to fraudulent investment opportunities, with scammers promising unrealistic returns of up to 10% per month.

Investment Frauds

In one notable case, a Singapore-based company operating as an investment outfit in Myanmar swindled millions from unsuspecting victims who were promised high returns on their investments. The scam was facilitated through Facebook, highlighting the ease with which fraudsters can now operate online.

Gold Savings Schemes and Lotteries

Other common consumer frauds include gold savings schemes, where investors are promised high returns on their gold deposits, and lotteries sold by scammers from Thailand and Singapore.

Occupational Frauds: The Inside Job

Asset Misappropriation and Cash Handling

Occupational frauds, on the other hand, involve employees or officials within an organization who use their position to embezzle funds, manipulate financial records, or engage in other forms of deceit. These types of fraud are particularly common in Myanmar’s public sector, where corruption and bribery are widespread.

Inventory Management and Expense Claims

Common areas of concern include asset misappropriation, cash handling, inventory management, and expense claims. In some cases, even pairing staff members may not be enough to prevent fraud, as employees who are complicit in the scheme may still find ways to manipulate records or conceal their actions.

Why Do These Frauds Happen?

Experts say that occupational frauds occur when three conditions are met: non-shareable pressure, opportunity, and rationalization. This means that employees may feel pressured to engage in fraudulent activities due to financial difficulties, perceive an opportunity to embezzle funds, or justify their actions as necessary for survival.

Similarly, consumer frauds often involve opportunistic scammers who take advantage of unsuspecting victims’ lack of knowledge about financial transactions or investment strategies.

How to Prevent Fraud

For Organizations

To prevent occupational fraud, organizations must implement robust internal controls and monitoring mechanisms to detect and deter fraudulent activities. This includes ensuring that employees are aware of the risks of fraud and reporting any suspicious behavior.

For Consumers

For consumers, prevention involves being wary of deals that seem too good to be true, researching investment opportunities thoroughly, and avoiding unregistered or unlicensed schemes.

Tough Penalties and Awareness

Tough penalties for those caught engaging in fraudulent activity can also serve as a deterrent, as well as raising awareness about the risks and consequences of fraud.

As Myanmar’s economy continues to grow, it is essential that individuals and organizations alike remain vigilant against financial fraud. By understanding the types of fraud that exist and taking steps to prevent them, we can work towards creating a safer and more transparent financial landscape for all.